SLO may give $2,000 bonuses to 93 high-ranking employees

April 4, 2017

By JOSH FRIEDMAN

Update: The San Luis Obispo City Council on Tuesday unanimously approved a plan to hand one-time payments of $2,000 to 93-management level employees, including City Manager Katie Lichtig and City Attorney Christine Dietrick.

Original: Although the city of San Luis Obispo is facing multi-million dollar shortfalls, city officials have put forth a plan to give a one-time payment of $2,000 to 93 management-level employees. The proposal will go up for a vote at Tuesday’s SLO City Council meeting.

In addition to considering the bonus payments, the council will be asked to approve increases to the management employees’ health and life insurance benefits. The bonus payments would cost a total of $186,000, while the benefit increases would cost about $65,000 annually, according to a city staff report.

If approved, the $2,000 payments and benefit increases would go to City Manager Katie Lichtig, City Attorney Christine Dietrick, nine department heads and 82 other management-level staffers. Lichtig already receives more than $300,000 a year in pay and benefits, and Dietrick receives around $270,000 annually in total compensation. Last year, both Lichtig and Dietrick received $5,000 retention bonuses.

Staff is proposing the one-time payments to compensate management employees for receiving less in city health insurance contributions than do members of the San Luis Obispo City Employees Association (SLOCEA), according to a staff report by Human Resources Analyst Nickole Sutter. The proposed lump-sum payments would also serve as a low-cost alternative to cost of living increases and would incentivize hard work and leadership.

Sutter’s proposal also calls for an approximately 5 percent bump in city health insurance contributions to management employees.

Additionally, Sutter suggests the city increase the term life insurance it provides to management employees from $50,000 to $100,000. Lichtig, Dietrick and the city department heads already receive the higher amount, according to the staff report.

Furthermore, Sutter is asking the city council to permit management employees to use more sick leave to care for ill relatives, something the human resources director said would not come at an increased cost to the city.

City officials are currently proposing revisions to the management employees’ compensation package, which expired at the end of 2016. Sutter is proposing the city council extend the previous agreement until June 30, 2018, with the proposed revisions to employee benefits included.

The city is currently facing a projected budget shortfall of more than $5 million in the 2021-2022 fiscal year. By that time, the city’s annual pension payment to the California Public Employees Retirement System (CalPERS) is projected to nearly double from around $11.7 million to $20 million.

The skyrocketing pension costs largely stem from a decision the CalPERS Board of Administration made in December to lower the retirement system’s discount rate from 7.5 percent to 7 percent. The change in the discount rate, or return on investment expectation, will be phased in over a three-year span, starting in the 2018-2019 fiscal year.

San Luis Obispo responded to the CalPERS changes by activating its Fiscal Health Contingency Plan, which includes limiting hiring to essential personnel; restricting city-funded employee travel and training; and deferring or dropping some capital improvement projects.

In her report on the proposed bonus payments and benefit increases, Sutter said that given the CalPERS decision and the activation of the fiscal contingency plan, the city is trying to give management employees more pay in a manner that will not be compounded by increasing obligations to CalPERS. Hence, the city is proposing freezing salaries for nearly half of the 93 employees in the management group over the next 15 months.

The city council will discuss the proposed bonuses and changes to employee compensation during its early meeting Tuesday, which is scheduled to begin at 4 p.m.







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33 Comments

  1. only-when-i-do-this says:

    I’d say it’s tax payer refund time! $186k was overpaid to the City of SLO.

    Refund it.

    (36) 38 Total Votes - 37 up - 1 down
  2. Pelican1 says:

    Wait a minute, back up the gravy train. So, the city is proposing to pay “bonuses” as a reward for bad behavior? Have they already forgotten the video produced by these very same people that stirred up so much anger and outrage?
    Why is the city so willing to continue to reinforce FAILURE? These are OUR dollars and without question WE should have a say so in this decision.
    I am demanding a referendum be held in order for the people to have a chance to speak regarding this issue.

    (34) 38 Total Votes - 36 up - 2 down
  3. TiaMiaOhMy says:

    REALITY CHECK FOR ALL THIS PEOPLE WHO SUCK AT THE TROUGH OF THE TAXPAYERS — try being self employed — we ARE the ones who will be paying EXTRA for your stink’in increase in “bennies” while we have to WORK our asses off to pay for our OWN meager Health care and life insurance, NO paid vacation,NO paid sick days…I have no sympathy or desire to GIVE any more to individuals who make a good salary without the risk! When there’s a “shortfall” in funds when you’re self-employed – something has to give…and it certainly doesn’t mean that you get to give yourself MORE money – it means that you have to usually cut back or maintain….that’s WHY our gov’t agencies get in the predicaments financially that they do! Checks and balances! DUH?!?!

    (62) 66 Total Votes - 64 up - 2 down
  4. TWEEKSBALMER says:

    Is it still April Fools Day?

    (53) 55 Total Votes - 54 up - 1 down
  5. kayaknut says:

    Come on now, you had to know this was coming after the residents voted for the new Measure G, you didn’t actually think the money was going to go to what they said it was.

    (56) 58 Total Votes - 57 up - 1 down
  6. CrisPow says:

    The union employees get a little more in health care benefits and a lot less in pay, so Katie Lichtig needs to make sure she gets massively more in pay and also more in medical and othe benefits. Bow to the queen you peasants.

    (75) 79 Total Votes - 77 up - 2 down
    • r0y says:

      Public Union employees get a “lot less in pay” compared to WHOM? Their management? Or other non-union employees (aka private sector)?

      This would be the first time I’ve ever seen anyone actually claim that public sector unionized employees get less in pay.

      (18) 20 Total Votes - 19 up - 1 down
  7. sloweb says:

    Solution: Reduce the contributions to SLOCEA! Then they would all be the same!

    Problem solved.

    (49) 53 Total Votes - 51 up - 2 down
  8. SLOBIRD says:

    “…Sutter is asking the city council to permit management employees to use more sick leave to care for ill relatives, something the human resources director said would not come at an increased cost to the city.”

    Only in government can you find that something does not have an increase in cost to the taxpayer.

    Here are the current MANAGEMENT BENEFITS for a full time employee………………………….

    Holidays: 11 fixed days and 2 floating days annually

    Administrative Leave: 80 hours annually (10 days – 2 weeks)

    Vacation: Employees accrue vacation leave with pay at the rate of twelve days per year of continuance service since the benefit date for the first five years, fifteen days per year upon completion of five years, eighteen days per year upon completion of ten years, and twenty days upon completion of twenty years. Minimum 12 days a year…

    Sick Leave: 80 hours annually (10 days) with no limit to the accrual total – currently can take 48 hours to care for a family member, 56 hours if hospitalized, UPON death 25% is paid to the employee, UPON retirement: after 10 years of service 10% to the employee and after 20 years of service 15%.
    No payoff if the employee leaves before retirement with 10 years of service and the benefit is dissolved.

    Management employees currently receive 34 DAYS OFF ANNUALLY for an employee with less than five years of service, and even more if over 5 years of service (there are 22 working days in a month) which equates to 1.5 months off a year. REALLY, and now they want more!

    (65) 71 Total Votes - 68 up - 3 down
    • r0y says:

      That’s a lot of math you worked out for them; I bet it came as a surprise to many, if not all. Hey, if they were good at math, they probably would not be in the public sector. Heck, if they were good at anything…

      (18) 20 Total Votes - 19 up - 1 down
  9. Slosum says:

    Really?!

    (43) 49 Total Votes - 46 up - 3 down

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